The network confirmed on Friday morning that Stefanovic has left its flagship breakfast program, Today, effective immediately.
The host's shock exit follows the release of his now-deleted podcast episode with British far-right figure Tommy Robinson, who has been accused of fuelling violent anti-immigration protests in the UK.
"Nine Entertainment and Karl Stefanovic have agreed that it is no longer possible for him to continue hosting Today at the same time as his independent podcast," a Nine spokesperson said.
"While Karl and Nine had previously agreed he would leave Today at the end of this year, they have subsequently decided he will leave the Network immediately."
In a note to staff about Stefanovic's departure, Nine's news and current affairs executive director, Fiona Dear, said protecting freedom of speech is at the core of 9News and Current Affairs.
"We have a rich history of interviewing controversial figures, and journalists have an obligation to ask difficult questions," she said in the internal note.
"Part of what makes us tick is trying to understand why people are the way they are, or think the way they think.
"We welcome open debate and challenging norms with constructive, balanced arguments."
She also acknowledged the challenging period for the Today show team and said the network will share plans for the show "very soon".
The decision to ditch Stefanovic was not entirely surprising, with the host moving away from his playful breakfast larrikin persona to embrace a more controversial role as a podcaster, the University of Sydney's Catharine Lumby told AAP.
"We're living in a very unhinged world, where polarisation is rife, driven by social media and their algorithms and that includes podcasting more broadly," Professor Lumby said.
"What's really fashionable at the moment is a lot of shouting and you see that on the left and on the right.
"The rise of Pauline Hanson is an index of that, of that polarisation in Australian society. It may well be that Karl's tuned into that and thinks that's a way to be relevant."
The almost-hour-long episode of The Karl Stefanovic Show, which is run independently of Nine, where he interviewed anti-Islam figure Tommy Robinson, saying he admired Robinson's "tenacity" and "courage", was published on Tuesday evening but was pulled down by the following morning.
However, the episode was resurrected on YouTube by Pauline Hanson, who Robinson praises several times during the interview.
Journalism expert Denby Weller said Stefanovic was likely to continue moving to the right, following other broadcasters who had used their traditional media profiles to build audiences in that space.
"He's been saying things for years now that have had a really strong appeal to centrist, right-leaning people, and more recently to far right-leaning people," the Swinburne University of Technology researcher told AAP.
"It mirrors what we're seeing in politics at the moment with a lot of politicians, particularly far right-leaning politicians, who are also moving away from mainstream media reporting on their work at all."
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